Gov’t offers help to firms in crosshairs
Prime Minister Lee Nak-yeon, sixth from left, and ruling Democratic Party Chairman Lee Hae-chan, seventh from left, pose beside other Blue House officials, ministers and top officials of the DP Party ahead of a meeting held Sunday at the National Assembly in Yeouido, western Seoul. The meeting, aimed to discuss countermeasures to Japan’s trade restrictions, was the first to bring together officials of the Blue House, DP Party and the administration. [YONHAP]
On Sunday, the Ministry of Trade, Industry and Energy organized an urgent meeting of associations of 11 industries most likely to be affected. The industries included semiconductors, displays, cars and robots.
Industry Minister Sung Yun-mo pledged in the meeting that the government had a “strong determination to utilize all assets to lighten the burden on local companies.”
He promised comprehensive support to develop domestic technology for parts and materials otherwise imported from Japan. The government said Friday that of 1,194 product categories restricted by Japan, Korea is particularly reliant on 159, and those are the items that will most severely impact local industries.
“In order to successfully develop materials, components and equipment, active collaboration between demand and suppliers is of utmost importance,” he said. “We will push efforts to offer a package of support in finance, tax benefits and deregulation to strengthen the domestic supply chain.”
A supplementary budget passed in a cabinet meeting Saturday included an additional 273.2 billion won ($226.8 million) dedicated to help local companies cope with Japan’s export restrictions. Allocated among the industry ministry, Ministry of Science and ICT and Ministry of SMEs and Startups, the budget item will offer financial support for tech development, test equipment and start-up funding for manufacturers in high-tech parts and material.
The entire supplementary budget, the third passed under the current administration, was 5.8 trillion won.
“Japan has crossed the line,” said Prime Minister Lee Nak-yeon in the Saturday meeting. Korea’s being dropped from the list is Japan’s second blow in the realm of trade following tightened export restrictions on three high-tech materials for chips and displays that went into effect July 4.
“We will execute this budget with speed and efficiency to maximize its effect,” Lee said.
Korea’s financial authorities also announced support plans Saturday. Companies affected by Japan’s export restrictions will be allowed to extend government loans and guarantees by one year, according to the Financial Services Commission (FSC). Beneficiaries will include domestic companies of all sizes that have a record since Jan. 2018 of purchasing products recently restricted by Japan. It will offer up to 6.7 trillion won to help small- and mid-sized companies normalize their operations in the wake of the trade restrictions.
FSC Chairman Choi Jong-ku brushed off concerns about the possibility of Japan’s trade restrictions expanding into the finance sector.
“Most industry experts believe it’s impossible, and even if such a situation was to happen, there would be no problem in coping with it,” Choi told reporters after a Saturday meeting with finance authorities and domestic banks.
Additional measures are supposed to be rolled out on Monday.
BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]
with the Korea JoongAng Daily
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